Class-Action Suit Filed Against Systemax (aka TigerDirect) Over Unfulfilled Rebates

Last Thursday, a Texan filed a class-action suit against Systemax Inc. in federal court, alleging the company and its subsidiaries TigerDirect and OnRebate conspire to delay or reject rebates in order to sweeten profits. Systemax says no way, we pay our rebates on time; according to its chief financial officer, “All consumers who properly complete the rebate application and submit the required paperwork have their rebates paid, period.” But that’s not what the Texan says happened to him.

Vukson promptly mailed in all the rebate materials and, after two months, had not heard from OnRebate. He sent an e-mail Jan. 24 inquiring about the rebate. In a Feb. 28 response, OnRebate said it had not received all the necessary materials to process his form. In March, the company refused to send the rebate, saying Vukson had missed the cutoff date, according to the suit, which lists several other alleged instances of consumers being denied rebates.

Rebates require you give up your money as an interest-free loan, while placing trust in a faceless company and postal system that you won’t be screwed over. They’re not worth it. We think the best thing to do is ignore sales that use rebates to drive down the total cost. Either the retailer can give you an instant discount and deal with the rebate himself, or you can pass on the offer. We’re shoppers, not business micro-lenders.

“Consumer sues Systemax over rebates” [Newsday]
(Photo: Getty)

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  1. Hedgy2136 says:

    The fact is, they count on a certain percentage of people not filing for the rebates to begin with, then count on a certain percentage not filing for them properly. I agree, rebates are a total rip off.

    Having said that, on the very few occassions I’ve filed for a rebate, I am meticulous about following the instructions and get my rebate.

  2. Dead Wrestlers Society says:

    I was interested in getting a flat screen monitor for my computer about a year ago and Tiger Direct sounded really good, especially with their rebates. However, after further research, I read a lot of people not only couldn’t get their rebates, they could not get a live person on the phone. These were big rebates ($75-$100) or so. I wisely shied away. I ended up getting it from newegg.com and they also had a rebate which I got rather promptly.

    There was a website/company a few years back which sold all sorts of merchandise at very high prices. However, they offered 100% back on a rebate. Their business model must have been, most people won’t go through the effort of filling it out and sending it in. The company ended up going bankrupt and customers were just SOL.

    I agree instant rebates are better than having to fill out paperwork and such, but for some of these electronic items, the rebates are pretty substantial.

  3. Bladefist says:

    I buy everything from tiger and have always received my rebates. Even though this article is more geared toward system max.

  4. Dead Wrestlers Society says:

    CyberRebates.com was the name of the website. Here’s a write-up of their “business model” and their eventual downfall.

    [pcworld.about.com]

  5. crnk says:

    Ahh CT consumer friendly laws…

    I didn’t buy a ton on rebate while living there, but it was great. $100 instant on my computer, $10 off a $12 pack of CFL spotlights instant, etc.

  6. Either the retailer can give you an instant discount and deal with the rebate himself, or you can pass on the offer.

    That’s pretty much always been my ideal.

  7. Hawk07 says:

    @public enemy #1:

    Yeah, that was cyberrebates.com

    Apparently their model work ok for a while, but they of course went belly up and consumers with outstanding rebates ended up getting about 8 cents on the dollar.

  8. Buran says:

    Gasp. A crook tries to weasel his way out of being blamed. Who would have imagined that!?!?

  9. lalala1949 says:

    I bought a 19 inch monitor from Tiger Direct 3 years ago and never received my rebate despite meticulously filling out the forms. I’m not surprised at the lawsuit. Only shop at newegg now.

  10. coan_net says:

    I’m not sure what the problem would be – he should show them the copy of the things he sent in. I do rebate stuff all the time, the tricks are:

    1. follow the instructions. If they want hand written information on a very small glossy piece of paper which will smear very easy, to that. (I also include the same information of an index card to make it easier to read – but NEVER skip the doing the original since that is in the instructions.) Pay attention to if they want a copy or original of UPC or reciept. Do they want the price circled? Do they want the date circled? Follow all instructions to a T since if not, they can easily claim you did not follow the steps. Don’t skip steps. Don’t assume anything. If questions, call the phone number on the rebate form if there is one – ask it BEFORE you send it. (for example, an item had 2 rebates that both wanted original UPC from it. After making calls, I found out which one will also accept a copy – and made a BIG not about it when I sent in the rebate about myself calling and told that copy was enough – with details on who I called and when.

    2. Keep track of it. I keep a little book, which record important things like amount, dates sent, along with phone #’s and websites to go to see about progress and such. Also how long the rebate will take. If it will take 4-6 weeks, on day 6 weeks, 1 day – I’m making a call if I heard nothing back.

    3. Make a copy of everything. I’ve had a few times when a claim got denied because something was not included – but after a quick response from me showing everything, I then got the rebate.

    4. When curring out UPC – if it is small, cut with plenty of room around it – make it bigger and harder to lose. I remember having to send in these little tabs from a Disney VHS tape – very small and easy to lose, so I made sure that I paper clipped them to a much bigger index card – to make sure they were not lost.

    Anyway, my experience with rebates have been very good – from many different places. Follow the instructions to a T.

    As for Systemax – where I work, we exclusively use their PC’s. I never have delt with rebates from them, but their equipment is great – and the support is top notch. I’ve called them twice. Once a power supply went out, and they over nighted a new one. The other one was a PC dead out of the box. Tech walked me through finding a simple cable not plugged in (not sure how I missed it). As I was ready to get off the phone with them, I turned on the PC and it was running. The tech actually stopped me and said “what is that noise” – he heard in the background that the fan was “clicking” – and ended up sending me out a replacement. Again, this extra support was done without me even asking. And all this was free (under warranty)

  11. Buran says:

    @coan_net: All that for something that should be taken care of for me? Forget it. It’s not my job to do all that. It’s THEIRS.

  12. ogremustcrush says:

    I am not completely opposed to rebates, as in I’ll submit the ones on the products I buy, but I will not buy on the availability of a rebate. The price has to be good enough before the rebate, it just sweetens the deal.

    On the topic of rebates and newegg.com, the last product I bought from them that had a mail in rebate was a video card. The rebate was for like 20 bucks on a $180 card, so useful, but I bought the card on its original price. The first card I received was defective, so I sent it back for a replacement. When I got the second card back, the rebate had expired, so I contacted newegg about it since there was a new rebate offer on the same card. They said I wouldn’t be eligible for the new rebate, but they credited me back the amount of the original rebate, which I thought was quite cool.

  13. Saboth says:

    I think we have all had this happen (a lot actually). Fill out everything perfectly, triple check it..mail it in…then 8 weeks later you merely get something stating something was missing or not filled out correctly. “Umm what? I know 100% it was filled out right, and you have everything you needed”. “We don’t know sir, the deadline has passed, sorry.” “You don’t know?”

  14. Murph1908 says:

    My worst experience with a rebate was mostly my own fault, but instigated by a bad system.

    I bought some computer memory at some retailer. There was a $40 rebate on the memory. I, of course, needed 2 sticks, as is common for computer memory to need to be installed in pairs, so I bought 2.

    Got home, discovered while filling out the form only one rebate allowed per household. WTF! I returned the memory and shopped around for a different deal.

  15. speedwell (propagandist and secular snarkist) says:

    I understand the people who say you have to jump through all the hoops, no matter how insignificant, or risk being turned down. That’s OK; that’s one strategy.

    Personally I think it’s outrageously poor customer service to force the customer to do all that nonsense, and it’s part of the plan to intimidate people from doing it at all. Normal customer service gives customers the benefit of the doubt. if you fail to send in the UPC, that’s one thing. If you fail to circle the date on the receipt, but it is printed clearly… heck, I’d be fired my first day for circling them myself if the customer forgot to.

  16. chandler in hollywood says:

    .
    I have had every one of my four TigerDirect rebates rebated. If you want a really evil company that needs to be put out of its fraudulent ways, it would be InPhonic. You send in a rebate, the acknowledge they got it and spend the next few YEARS informing you that they have transferred it to another processing center. I would have never bought the deal with T-mobile over the internet if it wasn’t for their $90 never to be seen rebate. They are being sued bu multiple attorneys general but they just move to another state and limit their liability. They need to not be allowed to do business anywhere.

  17. RagingBoehner says:

    My favorite was a rebate for a discman I sent in a few years back that was returned to me as invalid because the rebate form was “unreadable.” It had been sliced in half, presumably by some sort of automatic letter opener. I resent a new form with all of the materials they had sent back, and it was denied because it was past the deadline for submissions. Bastards.

  18. davidc says:

    @Consumerist: “We think the best thing to do is ignore sales that use rebates to drive down the total cost.”

    I don’t agree at all.

    Rebates (aka reverse coupons) are a great way to save money on items on your “to buy list”. Passing on the item generally means buying the same product at a higher price later.

    If you *wait* long enough the price will eventually fall, but if you wait 3-12 months for the price to drop, then buy said item, you are really getting less value for your dollar.

    ie: Those 3-12 months you could have been using said product is lost and the EoL (end of life) for said product is that much quicker.

    Just make sure the rebate company is reputable and you should have no problems. Out of my last 10+ rebate buys, I haven’t have a single problem.

    Then again, most of my buys are through reputable establishments like Dell, Best Buy, Frye’s, etc, etc.

  19. m0unds says:

    It’s often a good idea to avoid TigerDirect because they’re prone to questionable business practices. There are many better e-tailers who have better reputations, service and products.

  20. Nelsormensch says:

    It took me over 10 months to claim a rebate from TigerDirect.ca. The rebate was (mis-)handled by OnRebate.com (Systemax owns them too). Basically, I filled out all the paperwork appropriately, the rebate system said that everything was processed correctly, but I never actually received the payment. I called OnRebate, they said there had been an error and the payment would be issued in “5 to 10 business days.” This cycle repeated for nearly a year. I took getting a TigerDirect VP involved to actually get my payment (and he managed to get it done in less than 48 hours). It’s detailed here: [tenmonthsandcounting.blogspot.com]

    The Florida Attorney General’s office is conducting a substantial investigation into OnRebate’s practices. This class action has been a long time coming and was entirely preventable by Systemax. They made their bed and now they’ve got to lie in it.

  21. lalala1949 says:

    It’s Fry’s gosh darn it!!!

  22. I used to take rebates from Rite-Aid, because they make the process relatively painless. They take advantage of the fact that they already have a digital record of the transaction, so you only have to log in to a website and enter your receipt code, and anything that qualifies for a rebate will automatically be identified. About a month later, a postcard-check arrives in the mail.

    However, I’ve begun to see rebate notices as Orwellian faux-discounts that aren’t worth the time, and whether it’s accurate or not I now think “Oh, that product is marked up” whenever I see a rebate tag.

  23. bobpence says:

    I’ve had a bad taste for rebates for a long time, but on Black Friday last year I missed the no-rebate laptop I wanted and went for a Navamn F20 GPS instead: $330 – $100 rebate – $30 rebate. I got the $100 after I got an email saying the $30 was on its way. But…

    After months of empty commitments and getting nowhere, the rebate company tells me the vendor, Navman, did not fund the deal. This has a ring of familiarity to it. Anyone care to comment on who has what liability here, or have a similar experience?

    Office Depot stepped up and is sending me a check — no, it was never about the $30, it is about honoring advertised rebates — but this rebate deal on Black Friday probably yielded thousands of sales; how many folks never got their rebate checks?

  24. cheesyfru says:

    Tiger Direct is the only place whose rebate process has pissed me off so much that I simply won’t shop with them. If you don’t have a couple of hours free and an anal-retentive personality, don’t even bother.

  25. madanthony says:

    I personally love rebates. I use an excel spreadsheet to keep track of all my rebates, and I’ve received around $22,000 worth of rebates since 2002.

    I don’t mind rebates, because if you do jump through all the hoops, you can get significant savings, including items that are free or where you get paid more in rebates than the actual cost of the item.

    Also, rebates can sometimes be stacked with other promotions, like coupons (especially %-off coupons) to get even better deals.

    I will admit that there are some shady rebate companies out there. I’ve done a handful of tigerdirect/onrebate rebates and never had a problem.
    Most of my problem rebates have been random small companies, usually that process their own rebates (instead of sending them to a rebate processing house like Parago or Young America) – and they almost always seem to go to California addresses.

    If you do have issues with a rebate, there are a number of resources on the web that are helpful, like the rebate tracking forum on fatwallet.com, which has contact info for most rebate companies and tips on what companies are reliable.

  26. SeattleGuy says:

    Staples has an ‘Easy Rebate’ system that has always worked for me. Use some numbers off of the receipt and plug in your address. I’ve never been denied one, not a single one.

  27. RandomHookup says:

    I love that some states are going after the rebate houses on another front: checks that are never cashed by the recepient. Some AGs are insisting that isn’t just profit for the processing house — it’s unclaimed money and subject to the same processes as money left in bank accounts. I hope they take away the incentive of these places to “accidently” misaddress a check.

  28. Geekybiker says:

    Any rebate over about $50 I will send registered mail, return reciept. I have copies. I have proof they got recieved it, and when. Not alot of wiggle room there.

  29. Nick986 says:

    I’m still waiting on my $30 rebate from 2003 when I bought a media card reader from these folks. Numerous calls and nothing. Oh well.

  30. I’ve stopped shopping at TigerDirect all together. It was convenient at first, being as I live right near their Naperville, IL main warehouse, but their prices simply aren’t that great and their service is so far down the drain that it is actually out to sea.

    From now on, I’m a NewEgg devoted customer, thanks to an “Above And Beyond” experience I had that I plan on sharing with Consumerist soon.

  31. SuffolkHouse says:

    I bought Sirius Radio through Radio Shack ONLY because of the large rebate offered for the purchase of the radio. I had three adults check the instructions and the contents of the envelope.

    What happened?

    Denied. Evidently, each person who reviewed the contents of my submission missed something necessary. I say, “B.S.!!!”

  32. TedOnion says:

    I just plain don’t do rebates. Any system designed to maximize breakage is not something I want to be involved with. When I see an item for sale with a rebate, it’s a disincentive.

  33. spenc938 says:

    I actually have a story about this. About a year and a half ago I built a computer from tiger direct, and submitted about 10 rebates. Onrebate used to do what they called an “expedited rebate” where you would receive your money via paypal in like 3-8 days. But, if you wanted this service, they took out 15%. I needed the rebate money to finish the computer, so I opted for the expedited. After a month I called and was informed that they no longer offered expedited service, and I could expect the FULL rebates in 6-8 weeks. About four months after this, I got my rebates WITHOUT the 15%. I figured it wasn’t worth my time, and decided to drop it. I got an email from them yesterday, saying that my “No-Wait Fee Refunds” were pending. It has been over a year and a half, and I still do not have the money I was promised. It’s about time someone sues these assholes.

  34. ducksauce says:

    Tiger Direct is famous for doing everything in its power to not follow through on rebates. Any deals posted to the slickdeals.net forums are pretty much immediately downmodded if they are rebate deals involving Tiger Direct.

    Always do your research before buying online.

  35. Blue says:

    Ill be so glad when the day comes when corporations stop naming their companies by combining two words into one.
    Systemax………………….thats sounds so retarded. I’m sure the jackass who thought of that one probably has a graduate degree too. Idiots.

  36. lax2prg says:

    i bought a video projector from tigerdirect. such jokers. it had a $200 rebate attached. never came, never came, but i persisted. posted a complaint on another website, and then was contacted by their exec customer service, who said the rebate would be forthcoming quickly. when it didn’t show, i emailed exec cs again. they gave me the check number and everything. still, it hadn’t shown up. so they cut me another check. 2 days later a check arrived. cashed it. cool. 2 days later, a second check arrived. cashed it. double cool. they got what they deserve. my time was worth at least $200 more…never buy from them again, that’s for sure.

  37. ksnicholas says:

    I brought 2 items from TigerDirect, one with a $30 rebate, and another with a $100 rebate. Instead of being mailed in, there was an on-line form to fill out. The refunds were supposed to take 6-8 weeks to be processed, and the money was to be deposited in my PayPal account. The deadline passed with no rebates. The website allowed me to check the status of the rebates, and both said ‘processed’. I e-mailed them, and received a canned response and no resolution. I had to call them repeatedly to get the rebates. Their excuse each time was that there was a ‘computer error’ and they would get it fixed and send the rebate. I got the $30 one at about 4 months, and the $100 one at about 6 months. I got the money eventually, but it took a lot of my time to do so.